Can I be personally obligated to pay a collection for a closed incorporated business? 17 Answers as of August 20, 2012

I closed a business two years ago, and the linen company is after me for not paying for the rest of agreed contract. Can they go after me even though it was incorporated?

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Law Office of Kristen Allard Shier
Law Office of Kristen Allard Shier | Kristen Allard Shier
You can be held liable for the debt of the corporation if you signed a personal guaranty, which is essentially agreeing to be personally liable for the debts of a business. If not, the debt is on the now-closed business, and the creditor can only collect from the business.

It's possible that they are calling you because you were on the contract, signing on behalf of the business, in which case you are not personally liable and you can ask them to stop calling you.
Answer Applies to: Colorado
Replied: 8/20/2012
Cale Plamann | Cale Plamann
Probably not unless you also signed a personal guarantee.

As a side note, you may be able to sue the collection company under the Fair Debt Collections Practices act.
Answer Applies to: Wisconsin
Replied: 8/20/2012
Benjamin D Gordon, Attorney at Law
Benjamin D Gordon, Attorney at Law | Benjamin D Gordon
Generally no, an individual owner is not liable for the debts of a corporation. Many vendors, however, require you to sign a personal guarantee, and if you did so, you agreed to be individually liable for the corporation's debts.
Answer Applies to: Utah
Replied: 8/20/2012
Law Office of John C. Farrell, Jr.
Law Office of John C. Farrell, Jr. | John C. Farrell, Jr.
Some small business owners can be sued personally especially if they sign as personal guarantor.
Answer Applies to: Massachusetts
Replied: 8/20/2012
Douglas M. Philpott, P.C. | Peter J. Philpott
It depends on the capacity in which you signed and whether you signed a personal guarantee.
Answer Applies to: Michigan
Replied: 8/20/2012
    Stephens Gourley & Bywater | David A. Stephens
    Assuming that you did not personally guarantee the debt you would not be liable for it. You do act as trustee for closed corporation and its assets.
    Answer Applies to: Nevada
    Replied: 8/20/2012
    Law Office of Bijal Jani | Bijal Jani
    Companies can try to get paid on company contracts if the corporate entity is still active and/or if you personally guaranteed the payments.
    Answer Applies to: New York
    Replied: 8/20/2012
    Victor Varga | Victor Varga
    Not unless you also personally guaranteed the contract/signed the contract as yourself individually as well as the corporation. Otherwise no, you can not be held personally liable for the debts of your corporation.
    Answer Applies to: Maryland
    Replied: 8/20/2012
    Dennis P. Mikko Attorney at Law | Dennis P. Mikko
    If the contract with the linen company was signed only by the corporation, they cannot come after you personally. If you signed a personal guarantee for the contract, they can proceed against you.
    Answer Applies to: Michigan
    Replied: 8/20/2012
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    It depends on if you personally guaranteed the agreement. If not, then you should be able to get there case dismissed.
    Answer Applies to: New York
    Replied: 8/20/2012
    Slotnick & Schwartz
    Slotnick & Schwartz | Leonard T. Schwartz
    Not if you told them you are a corporation and if the corporation was billed and paid the bill. Hopefully you did not personally guarantee the debt.
    Answer Applies to: New Jersey
    Replied: 8/20/2012
    T.K. Byrne | Timothy K. Byrne
    If you signed as a guarantor of the debt or personally signed the agreement for the debt then you may be obligated for the debt.
    Answer Applies to: Mississippi
    Replied: 8/20/2012
    Meadow Walker, LLP
    Meadow Walker, LLP | Eric Meadow
    It depends on whether you incurred the debt on behalf of yourself and/or the corporation. You should check the contract, determine what personal information you provided, and determine whether you signed a personal guarantee for the debt.
    Answer Applies to: California
    Replied: 8/20/2012
    MatthewR. Schutz, Esq | Matthew R. Schutz
    No. Unless you personally guaranteed the debt.
    Answer Applies to: New Jersey
    Replied: 8/20/2012
    Law Office of D.L. Drain, P.A.
    Law Office of D.L. Drain, P.A. | Diane L. Drain
    It depends on several things: did you sign personally or as the officer of the corporation, did you sign a personal guarantee and did you breach the corporate veil.
    Answer Applies to: Arizona
    Replied: 8/20/2012
    Harris, Yug & Ohlinger
    Harris, Yug & Ohlinger | Roberta Ohlinger-Johnson
    If you signed a personal guarantee in the contract, then yes.
    Answer Applies to: Nevada
    Replied: 8/20/2012
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